Apgujeong Record High vs Songpa Decline... Despite Regulations, 'Jjin Gangnam' Remains Unbeatable

Apgujeong Sinhyundai 9th Complex 108.88㎡ Records New High at 3.6 Billion KRW in October... 550 Million KRW Increase in 9 Months
Songpa Helio City 84㎡ Drops 115 Million KRW in One Month... Differentiated Market Amid Real Estate Regulations

[Asia Economy Reporter Kangwook Cho] Even as the upward trend in apartment prices in the Seoul metropolitan area has eased, in Apgujeong-dong, Gangnam-gu?considered the flagship area for reconstruction in Seoul?a 30-pyeong apartment was sold for 3.6 billion KRW, setting a new record price. In contrast, in Songpa-gu, one of the three Gangnam districts, declining transactions are continuing. Despite various real estate regulations such as loan restrictions, taxes, and interest rate hikes, the ‘true Gangnam’ area is continuing its solo upward movement, signaling the start of a differentiated market trend.

According to the Ministry of Land, Infrastructure and Transport’s real transaction price disclosure system on the 25th, the Shinhyundai 9th apartment in Apgujeong-dong, with an exclusive area of 108.88㎡, was sold for 3.6 billion KRW on the 5th of last month, setting a new record. Compared to a 7th-floor apartment of the same size that was sold for 3.05 billion KRW in January, this represents an increase of 550 million KRW in just nine months. Additionally, the Hyundai 8th apartment, with an area of 107.64㎡, was sold for 3.68 billion KRW on the 12th of last month, also setting a new record. This is a 900 million KRW increase from the 2.78 billion KRW transaction price of an 8th-floor apartment of the same size in January.

Nearby complexes show similar trends. The Hyundai 2nd apartment, with an area of 160.28㎡, was contracted for sale at 5.8 billion KRW in early September. Compared to the previous transaction in April, this is about 500 million KRW higher, and it is a remarkable 1.5 billion KRW increase from the 4.3 billion KRW transaction price in December last year. Despite the designation of Apgujeong-dong apartment complexes as a land transaction permission zone at the end of April, effectively restricting transactions for purposes other than actual residence, record prices continue to be set one after another.

Despite the severe drought in transactions across the Seoul apartment market due to recent government regulatory tightening and the continued appearance of urgent sales or price declines in some areas, Gangnam-gu continues its record price march. Experts believe that demand is concentrated around highly preferred complexes, leading to continued record price phenomena centered on some high-priced apartments.

What draws attention is the differentiated market trend within the Gangnam area. In Songpa-gu, the sale price of an 84.99㎡ apartment in Jamsil Licentis, contracted on the 6th of this month, was 2.4 billion KRW, which is 220 million KRW lower than the 2.62 billion KRW transaction price for the same area last month. The same-sized unit in this complex had risen by more than 400 million KRW in nine months from 2.185 billion KRW in January this year. The sale price of an 84㎡ apartment in Helio City, Garak-dong, Songpa-gu, sold on the 2nd of last month, was 2.255 billion KRW, down 115 million KRW from the previous transaction.

Lee Eun-hyung, a senior researcher at the Construction Policy Research Institute, said, "In a situation where people are discriminated against based on the number of houses they own rather than the price of the house, there is naturally a higher preference for a ‘smart single house.’ When disposing of owned houses, there is a tendency to purchase flagship houses in the area or to buy houses in higher-tier areas than before."